A company purchased a POS cash register on January 1 for $5,400

Accounting Mar 26, 2021

A company purchased a POS cash register on January 1 for $5,400. This register has a useful life of 10 years and salvage value of $400. What would be the depreciation expense for the second-year of its useful life using the double- declining-balance method?

A. $500

B. $800

C. $864

D. $1,000

E. $1,080

Expert Solution

Answer:

C .

Step-by-Step explanation

The calculation of depreciation is shown below:

Depreciation for second year = cost *(1-rate)*rate

= $5,400 * (1-20%) * 20%

= $864

Therefore, the correct option is C

Rate = (1/useful life)*200%

= 20%

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